02428cam a22002777 4500001000700000003000500007005001700012008004100029100002100070245014400091260006600235490004200301500001900343520121700362530006101579538007201640538003601712690008601748690008801834700001501922700001901937710004201956830007701998856003802075856003702113w10105NBER20150303184152.0150303s2003 mau||||fs|||| 000 0 eng d1 aHaile, Philip A.10aNonparametric Tests for Common Values at First-Price Sealed-Bid Auctionsh[electronic resource] /cPhilip A. Haile, Han Hong, Matthew Shum. aCambridge, Mass.bNational Bureau of Economic Researchc2003.1 aNBER working paper seriesvno. w10105 aNovember 2003.3 aWe develop tests for common values at first-price sealed-bid auctions. Our tests are nonparametric, require observation only of the bids submitted at each auction, and are based on the fact that the winner's curse' arises only in common values auctions. The tests build on recently developed methods for using observed bids to estimate each bidder's conditional expectation of the value of winning the auction. Equilibrium behavior implies that in a private values auction these expectations are invariant to the number of opponents each bidder faces, while with common values they are decreasing in the number of opponents. This distinction forms the basis of our tests. We consider both exogenous and endogenous variation in the number of bidders. Monte Carlo experiments show that our tests can perform well in samples of moderate sizes. We apply our tests to two different types of U.S. Forest Service timber auctions. For unit-price ( scaled') sales often argued to fit a private values model, our tests consistently fail to find evidence of common values. For lumpsum' sales, where a priori arguments for common values appear stronger, our tests yield mixed evidence against the private values hypothesis. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aD4 - Market Structure, Pricing, and Design2Journal of Economic Literature class. 7aD8 - Information, Knowledge, and Uncertainty2Journal of Economic Literature class.1 aHong, Han.1 aShum, Matthew.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w10105.4 uhttp://www.nber.org/papers/w1010541uhttp://dx.doi.org/10.3386/w10105